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Copper production is Zambia's economic lifeblood and the nation's vast mines are a major employer in this southern African country of 12 million people.
"It can't be business as usual, we want to make a lot of changes and interpret what the president said in his speech in parliament," Magande told Reuters.
He was referring to President Levy Mwanawasa's plans unveiled in a speech to parliament that more funds would be spent to help fight poverty in the country. Zambia would earn up to $400m after introducing windfall and variable profit taxes on copper exports, he said.
Reaping benefits
Magande, who will present the 2008 national budget on Friday, said that "a lot of things the president said will be interpreted in the budget."
Mwanawasa said in his January 11 speech that Zambia had received little benefit in taxes from foreign mining firms and added that the government would introduce new taxes in order to reap the benefits of higher global metals prices.
Treasury data shows Zambia only collected $142m in mineral royalties and company tax from earnings of $4.7bn in copper and cobalt exports by foreign owners of its vast copper and cobalt mines in 2007. This, despite a 400% increase in global metals prices in the past seven years.
Zambia's new tax regime would effectively increase mining taxes to 47% from 31.7%.
Revolving fund
Zambia plans to operate a revolving fund this year for Zambians to access investment capital for projects in tourism, manufacturing, agriculture and other productive sectors. The country plans to direct some of the revenue from taxes to this fund.
Magande said Zambia would seek to promote higher gross domestic product (GDP) growth in 2008, but could not state if the government would stick to the 7% GDP projection outlined in a three-year economic growth programme in 2007.
Zambia's GDP growth has averaged 5% in the last six years.
"I get surprised when some people say 5% (average) growth has not been enough. There are too many expectations from our people. Some are already hopeful and are doing business while others hope for more," he added.
Fighting poverty
Magande said business conditions had improved.
"Those who are seeing the opportunities will benefit while others keep on complaining," he said to answer criticism from the opposition and some civil society groups that higher growth has not benefited the majority of Zambia's 12 million people.
Treasury data indicates that 65% of Zambians live on less than a dollar per day. Zambia says fighting poverty and growing the economy further will be its main priority in 2008.
- Reuters
